Aramco cuts March light crude oil pricing for Asia
Saudi Aramco lowered its official selling price for Arab Light crude to Asia by 20 cents/bbl to $1/bbl less than the regional benchmark
Saudi Arabia lowered March pricing on its light oil grades for customers in Asia as the world’s largest crude exporter looks to take on Iran, which is set to boost sales.
Saudi Aramco lowered its official selling price for Arab Light crude to Asia by 20 cents/bbl to $1/bbl less than the regional benchmark, the company told Bloomberg in an e-mailed statement last week.
Saudi Aramco was expected to widen the discount by 40 cents/bbl, according to the median estimate in a Bloomberg survey of seven refiners and traders in Asia.
Brent oil has lost about 8% this year on the outlook for increased exports from Iran after the removal of international sanctions. Saudi Arabia, the largest producer in the Organisation of Petroleum Exporting Countries, had output in January that was close to a record one month after OPEC abandoned its oil-production targets.
“Neither of them will want to give up an inch on market share until the situation is more clear in terms of how much additional supply is coming to market,” Robin Mills, CEO of Qamar Energy, told Bloomberg. “Iranians are trying to get back into the market and Asia is going to be the premiere market for both of them.”
Aramco cut the premium for Arab Extra Light crude to Asia by 40 cents/bbl to $1.30/bbl more than the benchmark, according to the statement. The company narrowed the discount for March sales of its Medium and Heavy grades to Asia, it said. Pricing is against the average of Oman and Dubai oil grades.
The company kept pricing for Light and Heavy crude to the US unchanged for March, and raised Arab Medium by 10 cents/bbl to $1.25/bbl less than the benchmark.
Buyers in Northwest Europe and the Mediterranean region will see wider discounts for Aramco’s Extra Light and Light grades, while Heavy barrels will cost more next month, according to the statement.
The benchmark for the US is the Argus Sour Crude Index and for European buyers it’s the ICE Brent weighted average.